Does the Fed have any bullets left?

To QE3 or not to QE3? That is the question for Federal Reserve chairman Ben Bernanke after another lousy jobs report.

QE3? Operation Twist 2? There will certainly be more pressure on the Federal Reserve to announce yet another round of stimulus ASAP following Friday's bloody-awful jobs report.

Stocks plunged. The 10-year Treasury yield hit another record low, with rates dipping below 1.5%. That is a Princess Bride level. A 10-year yield this low was considered "absolutely, totally, and in all other ways inconceivable" just a few years ago.

Investors are panicking and stampeding into the safety of U.S. bonds. Our new Fear & Greed Index, which tracks a combination of factors such as market volatility, stock price strength and demand for safe haven bonds and junk bonds, hit a new year-to-date low Friday of 9! (Number 9. Number 9. Number 9.) I will now see my Beatles reference and raise it with one to another British band (so psyched to see Radiohead tonight!)

"We're not scaremongering. This is really happening."

It is ugly. Fed chairman Ben Bernanke may need to do something. But the Fed has already done two rounds of so-called quantitative easing or QE, purchasing trillions of dollars in Treasuries to help keep long-term rates low. (Keep in mind that the Fed's key short-term rate has been near zero since December 2008 and the Fed has pledged to leave rates "exceptionally low" through 2014.)

The Fed has also been swapping short-term bonds for long-term securities. There's your Operation Twist. But Twist is set to expire at the end of June. And all eyes will be on the Fed when its policy committee meets on June 19 and 20 to see if there are any hints about an extension of Twist or something even more drastic like QE3.

"QE has provided liquidity to the market. And there aren't many other reasonable options for the Fed right now," said Alan McKnight, director of global investment strategy at Balentine, in Atlanta. "But we're coming up on almost four years since Lehman and we've had anemic growth despite all the monetary stimulus."

The Fed has two mandates, trying to achieve full employment and keeping prices stable. Keeping Wall Street happy is likely the unofficial third mandate. And let's be honest, that's all that QE3 would be good for at this point.

"I'm not sure what more monetary policy can do," said Keith Hembre, chief economist for Nuveen Asset Management in Minneapolis. "The Fed's actions have clearly affected the financial markets but we still have this underlying trend of weak jobs and economic growth."

Hembre said the Fed's best course of action is to sit tight and wait for more data. It's still not yet clear if the recent slump in the labor market is the beginning of a major downturn or just something temporary like last summer.

"This jobs report is clearly a disappointment but it's not a cause for pushing the panic button. There is a risk of negative consequences, such as higher inflation, if the Fed keeps pushing the envelope with monetary policy," Hembre said.

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Leslie Barbi, head of fixed income at RS Investments in New York, agreed. She said that extending Twist or announcing QE3 would probably be a mistake. The best the market can hope for is that Bernanke and other Fed members will continue to talk about supporting the economy ... but without pulling the trigger.

"The Fed is not going to pull something out of its hat just because of this jobs number. I don't see why it would move now," she said. "Rates don't need to be lowered further."

So what should the Fed do? Barbi thinks Bernanke needs to be ready to step in if Europe's woes lead to a Lehman-like banking crisis in the United States.

"Bernanke has proven to be a creative guy and the Fed would like to give the impression that it has a lot of other tools," she said, adding that the Fed would probably need to institute emergency lending facilities similar to those put into place in 2008 if all of a sudden there are legitimate fears about liquidity and a global credit crunch.

But Europe is the key wildcard. Stuart Hoffman, chief economist with PNC Financial Services in Pittsburgh, said the Fed should not act alone. If there is a need for more stimulus, he argues that it would likely be a coordinated effort with the European Central Bank, Bank of England and other central banks.

Hoffman said that he's hopeful that the U.S. economy (and Europe's) will look better by the time the Fed meets again, a two-day session that ends on August 1. However, he is concerned that the market could force the Fed's hand. Bernanke may not have the luxury of preaching patience if stocks continue to tumble and there are more months of lousy economic data.

"QE3 would not be the most effective thing to do. But it may be a case of people wanting the Fed to not just stand there and instead do something," Hoffman said.

Still, the Fed may have some other arrows in the quiver, bullets in the gun or other weapon metaphors of your choosing. Back in March, there was chatter of the Fed doing so-called sterilized bond purchases to keep long-term rates low. By that, the Fed could buy more long-term bonds but borrow the money back from investors. That could potentially limit the usual QE criticism, namely that the Fed is printing more money and fueling the chance of runaway inflation down the road.

But Steve Blitz, chief economist with ITG in New York, thinks that would be a bad idea. He argues that the only thing to get the global economy back on track is for the most prosperous nations to consume more.

"How much lower can you drive rates? We've reached a point where the world's creditor nations, mainly Germany and China, have to step up and spend money. That will turn the economy back towards growth," he said. "The idea that austerity and low rates will magically get the economy back towards growth was always an illusion."

Blitz also thinks that the best thing for Bernanke to do at this point is to bully/scare lawmakers into actually doing something helpful. In other words, Bernanke needs to continue pressuring Congress to act now instead of bringing the economy to a so-called fiscal cliff at the end of the year where several tax cuts could expire and the debt ceiling may need to be raised again.

"If I were Bernanke, I would be yelling at Congress to do something right with fiscal policy. There can't be any more uncertainty about the fiscal cliff at the end of the year. Democrats and Republicans have to stop playing politics and actually be statesmen."

Paul R. La Monica is an assistant managing editor at CNNMoney. He is the author of the site's daily column, The Buzz, and also tweets throughout the day about the markets and economy @LaMonicaBuzz. La Monica also oversees the site's economic, markets and technology coverage.